Consumer Confidence Rises, Driven By A Boost In Confidence In Personal Finances

As summer officially ended over Labor Day, consumer confidence jumped slightly to hit a reading of 53.3 points over the past two weeks, according to the HPS-CivicScience Economic Sentiment Index (ESI). The index rose a total of 0.5 points, its highest overall reading since May 29th.

The increase in the ESI was driven by consumer confidence in personal finances and making a major purchase, while economic sentiment towards the broader economy fell by 0.5 points.

Overall, four of the ESI’s five indicators increased during the two-week reading period. The largest increase was in consumer sentiment towards their personal finances which rose to a reading of 67.4, a 1.3 point increase. Meanwhile, consumer sentiment towards making a major purchase increase 0.9 points to 54.1, slightly off 2018’s high of 54.4. Economic sentiment towards the housing market rose by 0.4 points to 47.8 while confidence in the labor market remained unchanged.

The only indicator to fall was consumer confidence in the broader economy which fell 0.5 points amid escalating trade tensions between the U.S. and Canada, with rising uncertainty over a possible trade deal between the two nations.

Over the course of the two-week reading period, the three-day rolling average rose 1.5 points, rising steadily between the beginning of the reading period on August 22nd and August 31st. The moving average then fell slightly to end the observation period at a reading of 53.6 points.

The drop in the ESI comes as NAFTA renegotiation remains imperiled with doubt. Following the news of a bilateral deal between the U.S. and Mexico on Monday, August 27th economic sentiment rose steadily, however, following the news that an agreement had yet to be reached with Canada on September 1st the moving average fell 0.7 points and then continued to fall until the conclusion of the reading period on September 4th.